RBS Citizens Bank Accused of Profiting from Customer Math Errors
Thursday, May 10, 2012
RBS Citizens bank is being sued for allegedly taking advantage of customers when they mistakenly low-ball the amounts of their deposits, resulting in the bank keeping the difference.
In a federal class action lawsuit, lead plaintiff Todd Bowers Inc., a chiropractic office, cited one example in which the customer inadvertently recorded a deposit totaling $1,448.57, when in fact the amount was $26.50 more ($1,475.07). But instead of crediting the difference to Bowers’ account, the bank put the money into another account not controlled by the plaintiff.
“Citizens Bank affirmatively masks or hides the actual amount deposited and retains and diverts customer funds into at least two accounts Citizens Banks [sic] maintains and control,” the complaint states.
Bowers’ suit added: “Citizens Bank developed a policy and employs a practice whereby customer funds are being diverted daily for the benefit and use by Citizens Bank without the knowledge, consent or approval of the customer.”
The civil case comes just days after the bank agreed to pay $137.5 million to resolve another class-action lawsuit that alleged Citizens and other banks increased the amount they could collect in overdraft fees by processing the most expensive charges first rather than processing them in the order in which they were received..
Citizens Bank is part of Citizens Financial Group, which is a unit of the Royal Bank of Scotland, which is in turn owned (84%) by the government of the United Kingdom.
Citizens Republic bank received a $300 million bailout from the U.S. government in 2008 and RBS took £45.5 billion ($62.4 billion) in bailout money from British taxpayers.
To Learn More:
Bank Preys on Customers' Bad Math, Class Says (by Jack Bouboushian, Courthouse News Service)
Todd Bowers v. RBS Citizens Financial Group (U.S. District Court, Northern Illinois) (pdf)
Citizens Bank Is Latest to Settle Suit on Overdraft Fees (by Ann Carrns, New York Times)
$137.5 Million Settlement Announced in Citizens Bank Overdraft Fee Class Action (LexisNexis Litigation Resource Community Staff)
The Real Wall Street Bailout Totaled $29 Trillion (by David Wallechinsky and Noel Brinkerhoff, AllGov)
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